Monday, July 26, 2021

Notes From All Over -- July 26, 2021

Disclaimer: this is not an investment site.  Do not make any investment, financial, job, career, travel, or relationship decisions based on what you read here or think you may have read here

Inflation: a key gauge of future inflation is easing. Link to The WSJ.

Bidinflation: Breitbart --

Might as well break it to the kids now. Christmas may look a bit austere this year. Hasbro—the maker of Monopoly, Nerf, and Dungeons & Dragons—announced that it is implementing price increases that will "go into effect fully for the fourth quarter" in order to maintain profit margins in the face of skyrocketing costs. This was music to the ears of investors, sending the stock up better than 12 percent Monday. But whatever tune those investors were singing, it certainly wasn't a Christmas carol — because the fourth quarter price hikes will come in what is known to the rest of us as the Christmas season.

We do not mean to cast aspersions on Hasbro or its investors. As the toy maker's CEO pointed out in an interview with CNBC, ocean freight is on average four times as expensive as it was a year ago. They aren't waging a war on Christmas here. It's just that inflation is here, and it does not look like it is going anywhere. Shoppers are likely going to find that things are a lot more expensive come Christmas time.

As Greenlight Capital's David Einhorn detailed in a letter to investors sent out Monday, much of the capital investment made over the past decade has gone into digital media, unprofitable tech companies, and companies that profess the woke capital catechism trinity of environmental/equity, social, and governance. That has left the kind of companies that make the things that are rising in price starved of investment and unable to expand production to meet demand. Investors in Tesla—up 113 percent over the past 12-months—are no doubt happy, but nothing Tesla does is going to resolve the shortage of cars and trucks that has sent used auto prices up 10.5 percent in June and more than 45 percent since last year.

"The point is, we believe we have reached a structural change in inflation," Einhorn wrote. "Part of that is driven by public policy, but part of it has been driven by capital markets and ESG mandates.The enormous emphasis on investing in often money-losing businesses in disruptive areas like technology has left traditional industries starved for growth capital. The result is they haven’t grown capacity and now they cannot meet demand. The more these ‘value' stocks are starved of capital, the higher prices are likely to go and the longer the inflation is likely to last."

All the talk about inflation being "transitory" may actually be making things worse. Higher prices would ordinarily lure investment. But with Fed officials and the Biden administration insisting that prices will not keep rising—recall that Biden recently claimed that his $4.1 trillion spending package would reduce inflation—investors are likely deterred, according to Einhorn. That would explain, for example, why new home sales remain surprisingly low despite record high prices. Who wants to invest in building new homes—or in a home builder—if the Fed is promising to crush the price gains? Ironically, that underinvestment will likely mean supply constraints remain in place and prices do keep rising.

– Alex Marlow & John Carney
Breitbart News Network

Whether or not one agrees with Marlow & Carney, it's hard to blame Hasbro's price increases on President Biden.

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Give It A Rest

US set to push global economy over recovery line: see The WSJ

  • US 2Q21 likely exceeded pre-pandemic GDP, if so, a landmark moment for the global recovery is likely:
  • again, the incumbent has bragging rights
  • from the linked article:

The U.S. economy likely returned to its late-2019 size during the three months through June, helping to lift global output above its pre-pandemic level for the first time.

Economists surveyed by The Wall Street Journal estimate that figures to be released Thursday will show that the U.S. gross domestic product rose at an 8.5% seasonally adjusted annual rate in the second quarter. That likely left U.S. GDP—the value of all goods and services produced across the economy, adjusted for seasonality and inflation—above the $19.2 trillion level reached in the final quarter of 2019, the last before the spread of Covid-19 pushed large parts of the global economy to shut down and contract, they say.

The combined economic output of the Group of 20 leading economies exceeded its pre-pandemic level in the first quarter,  according to estimates by the Organization for Economic Cooperation and Development. With the U.S. and a number of other large economies crossing that threshold in the second quarter, it is likely that global output is now higher than the level recorded in the final quarter before the coronavirus struck, the group says.

It will be interesting to see what Rick Santelli, CNBC, has to say if US GDP comes in at 8.5% for the 2Q21. I believe this will be the "first reading" as they say. If traveling, I may miss Santelli's comments.

One assumes the market has already "baked in" this 8.5% 2Q21 US GDP. Prediction: come Thursday, the Dow will go up, go down, remain unchanged.

Meanwhile, for the rest of the year, from Goldman Sachs:

Goldman Sachs trimmed its U.S. economic growth forecast for remainder of the year on Monday, citing a slower recovery in the services sector.

The Wall Street bank revised both Q3 and Q4 growth 1 percentage point lower, to 8.5% and 5.0% respectively. That left the 2021 growth forecast at 6.6% on a full-year basis.

"We have long expected growth to peak in a mid-year boom fueled by vaccination and fiscal support," Jan Hatzius said on a note to clients. "But the subsequent deceleration now looks likely to be a bit sharper because the goods-to-services rotation is likely to be less seamless."

Weren't we trying to get to 6% under a previous administration?

US equities: apparently major indices hit new records today. 

Roku: link here.

"They" say AAPL is expensive at 34x earnings. We will see tomorrow. If AAPL misses, shares will plummet. Think SAM from last week. 

TSLA, link here. Profits "soar" to record -- The WSJ.

  • sales and profit exceeded estimates:
  • record-setting deliveries for the June, 2021, quarter;
  • shares gained a paltry 2.5% after-hours:
  • revenue: $11.96 billion vs $11.3 billion; and $6.04 billion y/y (comparisons with 2020 irrelevant)
  • adjusted earnings: $1.45 vs 97 cents and 44 cents y/y/ (ditto)
  • record-setting deliveries: 201,250 vehicles

Intel (INTC) set plans go again become world's premier chip company: easier said than done. Link here. Apple, Inc., has huge lead. Huge. 

McKesson: increases quarterly dividend from 42 cents to 47 cents. Let's see, 5 / 42 = 12%. That seems a nice offset to "inflation." Again, the gap widens between the investor class and the non-investor class. 

Disclaimer: this is not an investment site.  Do not make any investment, financial, job, career, travel, or relationship decisions based on what you read here or think you may have read here

SCCO: this one is very, very interested; previously posted; increases quarterly dividend from 70  cents  to 90 cents.

Each quarter for the past few quarters SCCO has been increasing its dividend. Starting on 5/12/20: 20 cents; 40 cents; 50 cents; 60 cents; 70 cents; and now 90 cents. From 20 cents to 90 cents has more than quadrupled in one year; let's see, --- this most recent increase, 20/70 = almost 30% increase. 
Again, ... well I don't need to repeat myself. Trading at $65; a P/E of 24; a dividend yield of 4.44% prior to this most recent dividend announcement. Record date: Auugst 12, 2021; pay date; August 26, 2021.

Automobile manufacturers: in deep doo-doo. Link here. 

Disclaimer: this is not an investment site.  Do not make any investment, financial, job, career, travel, or relationship decisions based on what you read here or think you may have read here

Vaccine rollout, CDC data, Monday, July 26, 2021, link here:

  • delivered: 394,949,575
  • administered: 342,212, 051
  • at least one dose: 188,729, 282
  • fully vaccinated: 163,173,366

Covid-19:

  • will widen the gap among the West, the "East", the emerging markets, and the failing countries:
  • the gap might be most noticeable in the West, between the US and the EU;
  • free-market capitalism, entrepreneurial spirit, makes a huge difference

US to end combat operations in Iraq by year-end. -- President Biden.

  • if he pulls this off, he will go down in history as ending the last American wars; 
  • Trump was going down that road but never pulled it off;
  • good, bad, indifferent, that's how the history books will report it; "Biden ends last American wars." 

Semi-pro football: apparently Texas and Oklahoma leave the Big 12; join the SEC.

Russia banned from the Olympics over doping violations: Russian gymnasts take gold.

Seven Permits Renewed; No New Permits -- July 26, 2021

MDU: expanding natural gas services to Wahpeton, Kindred (eastern North Dakota). Press release

NDIC scout tickets have not been updated.

Active rigs:
 

$72.16
7/26/202107/26/202007/26/201907/26/201807/26/2017
Active Rigs2313596360

No new permits.

Seven permits renewed:

  • Equinor (5): two Lucy Hanson permits and three Larsen permits, all in section 15-154-100, Williams County;
  • Prima Exploration: one State permit, in Divide County
  • Sinclair Oil & Gas: one Olson Federal permit in Dunn County

Whiting; The other day it was reported that Whiting will be acquiring assets in the Sanish oil field. The seller was not identified which usually means the seller is not a publicly-traded company. My first thought, the seller might be Slawson, but I'm now leaning toward Kraken Oil & Gas, LLC.

NDIC Updates Not Showing Up Or Maybe I'm Doing Somethiing Wrong -- Perhaps Time To Take A Few Days Off -- ReGroup -- I Will Have To Talk To Sophia -- July 26, 2021

NDIC: it appears the NDIC has quit updating scout tickets. The last scout ticket is for permit/file #38429. I believe we should be up to #38443 -- on Friday, July 23, 2021, the daily activity report, for example, posted six new Hess permits, none of which have been posted as scout tickets. Whatever. 

Active rigs:

$71.94
7/26/202107/26/202007/26/201907/26/201807/26/2017
Active Rigs2313596360

Wells coming off confidential list --

Monday, July 26, 2021: 11 for the month, 11 for the quarter, 191 for the year:

  • None.

Sunday, July 25, 2021: 11 for the month, 11 for the quarter, 191 for the year:

  • None.
Saturday, July 24, 2021: 11 for the month, 11 for the quarter, 191 for the year:
  • 37888, conf, Petro-Hunt, State 158-91-16C--2H, Kittleson Slough, producing, NDIC has not posted information;
Friday, July 23, 2021: 10 for the month, 10 for the quarter, 190 for the year:
  • 37889, conf, Petro-Hunt, State 158-91-16C-9-3H, Kittleson Slough, producing, NDIC has not posted information;
  • 37259, conf, Nine Point Energy, S Missouri 152-103-4-2-9H, Eightmile, producing, NDIC has not posted information;
  • 35562, conf, Liberty Resources, McGinnity E 159-93-31-30-4TFH, Northwest McGregor, producing, NDIC has not posted information;

RBN Energy: OPEC+ adjusts as crude oil comes into view for 2022. Archived.

As the outlook for crude oil in 2022 came into three-dimensional view this month, the market’s steadying mechanism managed to right itself again after another wobble. 
The Organization of the Petroleum Exporting Countries took its first formal look at next year in its July Monthly Oil Market Report, becoming the third of three widely watched prognosticators to do so. 
Among the other two, the International Energy Agency began projecting 2022 oil-market data in its June Oil Market Report, and the intrepid U.S. Energy Information Administration took its first analytical shot at next year way back in January in its Short Term Energy Outlook. 
The important third dimension that OPEC gave to the 2022 oil-market picture arrived on July 15 after two weeks of worry about whether production restraint by most of the group’s members and cooperating countries would survive. On July 18, though, the internal squabble driving that concern ended in a compromise that will result in production quota increases for several OPEC+ members. 
The 2022 projections by OPEC, IEA, and EIA, not to mention worry-driven elevation of crude oil prices prior to the compromise, make clear that the market needs OPEC+ to continue the orderly unwinding of its production cuts. In today’s blog, we compare the three forecasts and look at how the latest adjustment to OPEC+ supply management will affect the market.

Sunday, July 25, 2021

Now, For The Damages -- July 25, 2021

This story was published some days ago, in The Williston Herald, but for some reason I never posted it.

Posted now.

Last year the North Dakota Supreme Court upheld a lower court decision in the Wilkinson’s disputed mineral rights case that the state no longer has any claim to any minerals under Lake Sakakawea that lie outside the historical Missouri River channel.

But it also sent the case back to the lower court in Williams County, to consider damages.

Judge Paul Jacobson did just that on Thursday and Friday, hearing testimony from Wilkinson family members about their struggle to regain minerals that official records show the family retained after Lake Sakakawea was flooded in 1958.

To catch up on the story, see the tag,  "high water mark" or "riparian," although the latter was seldom used.

I considered this story the most egregious story to have come out of the Bakken up to that time, and I'm not aware of any story that is more egregious to this day. This was a "land grab" by the state, pure and simple; fortunately the court agreed.

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Whistle Register

Something to share with the oldest granddaughter who knows so much about music. I don't know if she knows about this, the whistle register.

At wiki.

For Investors Only -- Nothing About The Bakken -- July 25, 2021

Global investors: $1 trillion invested in US funds in 1H21, a record amount. Link to The WSJ. Some numbers rounded. 

Investors world-wide have funneled more than $900 billion into U.S.-domiciled mutual and exchange-traded funds, on a net basis, during the first half of the year. 
That is a record in data going back to 1992 and is more than investors have put into funds elsewhere around the world combined during the first two quarters of 2021.

This is just "mutual funds and ETFs ." Doesn't include other equities. Much more at the link. When you look at the American indices and the German index, imagine you are a German investor and not an American. My hunch: American mom-and-pop retail investors are doing a lot better than professional Germany money managers.

Previously posted:

Amazing graphics:

Graphic above:

  • A: trajectory when folks thought we were coming out of the pandemic; extend line A and we're easily at 36,000 for the Dow;
  • B: trajectory when vaccinations slowed down; and delta variant emerged
  • C: trajectory not seen; when delta variant concerns dissipate, probably beginning in October, 2021;

The graphic that absolutely amazes me

Someone is reading the blog. From Bloomberg via Yahoo!Finance today:$17 trillion "on the sidelines.


In the stock market, the refusal of retail investors to back down from every macro threat has become the only story. When will it end? Judging by the size of all the pools of cash lying around, it could be a while.

Among all the economic stories of the pandemic, the one about money piling up in people’s accounts has been the most significant in the stock market, where the S&P 500 just notched its seventh gain in nine weeks. Money market accounts, viewed in some circles as a “dry powder” reserve for equity deployment, sit at just under $4.5 trillion. A more obscure balance, the Federal Reserve’s count of money on deposit with commercial banks, has risen 33% from 2019 to $17 trillion.

While none of the money is completely unencumbered and professionals tend to hate the concept of “cash on the sidelines,” something is arming the day-trader cadres who seem bent on letting no market selloff last more than 24 hours. Take Monday, for example, when fears the delta variant would upend progress sent the S&P 500 down as much as 2.2%. Dip buyers ran to the rescue then and the rest of the week, sending the S&P 500 higher by almost 2% through Friday, despite virus cases still spiking.

Whiting's S-Bar And Satterthwaite Wells In The Sanish

The wells:

  • 37083, conf/producing, Whiting, S-Bar 11-7HU, Sanish,
DateOil RunsMCF Sold
5-202143442510
  • 37082, conf/producing, Whiting, S-Bar 11-TFHU, Sanish,
DateOil RunsMCF Sold
5-202125491521
  • 24264, AB/1,253, Whiting, S-Bar 11-7H, Sanish, t3/13; cum 159K 12/19 
  • 24263 AB/503, Whiting, S-Bar 11-7-2TFH, Sanish, t3/13; cum 106K 12/19
  • 17964, 571, Whiting, Satterthwaite 11-7H, Sanish, t6/09; cum 190K 3/21;
  • 21252, 690, Whiting, S-Bar 11-7TFH, Sanish, t2/12; cum 113K 3/21;
  • 36862, conf/drilled/awaiting completion, Whiting, Satterthwaite 13-7-2H, Sanish, spud, December 16, 2019; TD, December 22, 2019;
  • 36863, conf/drilled/awaiting completion, Whiting, Satterthwaite 13-7XH, Sanish, spud, December 24, 2019; TD, December 30, 2019;
  • 18965, AB/1,264, Whiting, Satterthwaite 13-7H, Sanish, t9/10; cum 246K 12/19;
  • 21935, AB/812, Whiting, Satterthwaite 14-7TFX, Sanish, t5/12; cum 122K 2/20;
    21936, 1,443, WHiting, S-Bar 14-7XH, Sanish, t5/12; cum 188K 12/19; but back on line 5/21; for four days; 
  • 21937, AB/813, Whiting, S-Bar 14-7TFX, Sanish, t5/12; cum 112K 2/20;
  • 36895, conf/producing, Whiting, Satterthwaite 14-7HU, Sanish,
DateOil RunsMCF Sold
5-2021600
  • 36896, loc, Whiting, Satterthwaite 14-7TFHU, Sanish, 
  • 36897, conf/producing, Whiting, Satterthwaite 14-7XH, Sanish,
DateOil RunsMCF Sold
5-2021650

The Niemitalo Wells

The wells:

  • 18481, 2,672, Whiting, Niemitalo 12-35H, Sanish, t5/10; cum 637K 5/21;
  • 17575, 3,260, Whiting, Niemitalo 11-35H, Sanish, t3/09; cum 703K 5/21;
  • 19502, 2,720, Whiting, Niemitalo 31-15XH, Sanish, t2/11; cum 511K 5/21;
  • 32624, 891, Whiting, Niemitalo 11-35H-2H, Sanish, t11/19; cum 244K 5/21;
  • 22710, 615, Kraken, Niemitalo 24-13H, Sanish, t1/13; cum 421K 5/21;
  • 32124, loc, Kraken, Niemitalo 31-15-2XH, Sanish,
  • 32123 loc, Kraken, Niemitalo 31-15-3XH, Sanish,

Breaking On Twitter, Elsewhere -- July 25, 2021

Peak viewing hours, Sunday afternoon, 3:00 p.m. CT for the Olympics:

  • table tennis (ping pong); and,
  • men's basketball, France vs USA; we already know the outcome of this one; first Olympics basketball game since 2004 that the US has lost; 

Any question why viewership is down; a 33-year low.

Olympics:

  • US men's basketball: loses first game in Olympics since 2004; lost to France
  • tennis: world's #1 loses (and is out) to world's #48
  • US women's gymnasts: one point behind Russia in qualifying; team looks vulnerable; 
  • good for her: Naomi Osaka wins her opening match; moves on; earlier she had skipped the French Open and Wimbledon;

Schlumberger:

  • to drill thirteen exploratory wells of Libya; link here;

GasBuddy:

  • weekly US demand reaches new 2021 high; bests week ahead of July 4, 2021; link here;
  • weekly (Sunday - Saturday) US gasoline demand set a new 2021 record, rising 2.3% from the prior week and was up 3.1% vs the four-week average; weekly demand was 0.6% higher than the week ahead of July 4 (week of 6/27)

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The Grandsons -- Portland, OR

This is Judah. 

Local church music director.


Canadian Shale -- EIA -- 2015

Link here.

***********************
Inflation? What Inflation?

Bananas at Target this morning: 49 cents/pound, and they have so many, they will have to be marked down unless they plan to throw out a lot.

I have four grocery stores to choose from, all within biking distance, the nearest two minutes away and the farthest ten minutes away.

Tom Thumb: local regional; low-rent; last choice for me of the four; only went when we lived at our previous apartment; would never go there again; expensive; shoddy; owned by Albertson's just down the street.

Albertson's: nationwide grocer. A bit more upscale. Somewhat competitive. Much better meat selection than any other in the area. Outstanding rotisserie chicken, and still priced at $6.99. It's the only place I can find the fruit and fresh vegetables that my wife wants.

Walmart: everyone knows Walmart. No need to discuss.

Target: wow, what can I say! This store is incredibly busy. Tom Thumb is generally devoid of customers; Albertson's doing better but parking lot is really quite empty, considering. Target: parking lot is always full. People arrive before the store opens and wait for doors to open. I can bike there in less than two minutes. No exaggeration. Probably slightly more expensive than Walmart but a better shopping experience. It seems about the right size. For just a handful of items, it's a real trek to go to Walmart. I don't think Target has hot rotisserie chicken but it does have "cold" rotisserie chicken in the deli section, or whatever it's called. The meat / fish selection does not compare at all to what we get at Albertson's. But wow, that store is incredibly busy. They seem to have the right mix of self-checkout and checkers. But sometimes the self-checkout line gets really long. 

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Playing In The Mud

In the photo below, Corky and Jilly Bean. Correct spelling.

Sophia was painting a picture of a fairy castle or some such thing.

Sophia's mom was about to move Corky and Jilly Bean closer so they could see the painting better. 

Sophia yelled out: "No! They're playing in the mud." 

Deals In The Oil Patch -- Reuters -- July 25, 2021

Link here to Reuters. Numbers rounded from original article.

Macro:

  • first five months of 2021: sales of land parcels worth $6.9 billion, almost eclpsing the $7 billion recorded in all of 2020;
  • 2020: last year was the worst for US acreage sales since at least 2006
  • more deals on the way: more than $12 billion either up for sale or being prepared to come to market in the US

Individual exhibits:

  • OXY:
    • marketing 250,000 net acres in Delaware portion of the Permian;
    • $550 million
    • the company has targeted more than $2 billion from divestments in the first hal fo f2021
  • Ovintiv:
    • completed in mid-May, $880 million sale of its Eagle Ford position
    • sold to Validus Energy
  • Laredo Petroleum:
    • will sell a 37.5% stake in two Texas counties
    • buyer: Sixth Street Partners
  • Exxon Mobil:
    • may divest parts of its shale gas business in North America
  • Pursuing acreage sales:
    • OXY
    • Chevron
    • Whiting
    • COP
    • Callon Petroleum
  • Advance Energy Partners, majority owned by EnCap
    • exploring a sale around $2 billion
  • NORTH DAKOTA RimRock Oil & Gas
    • private equity firm Warburg Pincus asked for indicative acquisition offers for a deal that could exceed $500 million
  • EnCap-backed Grayson Mill Energy:
    • bought the Bakken shale assets of Equinor for $900 million (previously posted)
  • Uinta (Utah), Denver-Julesburg (Colorado)
    • unattractive due to federal and state political issues

From the blog's "Bakken Operators":

RimRock Oil & Gas

******************************
Warburg Pincus - RimRock Oil & Gas

Link here

A portfolio company is a company (public or private) that a venture capital firm, buyout firm, or holding company owns equity. In other words, companies that private equity firms hold an interest in are considered portfolio companies. Investing in a portfolio company aims to increase its value and earn a return on investment through a sale. Link here. And here (wiki).

$500 million / 120,000 acres = $5,000 / acre
$500 million / 30,000 acres = $17,000 / acre

Talking About The Bakken -- July 25, 2021

Note

  • I remain inappropriately exuberant about the Bakken.
  • This is not an investment site.  
  • I often misread things.
  • I often see things others do not.
  • I often make huge mistakes. I generally acknowledge huge mistakes unless they are opinion pieces, if that makes sense.
  • I have a hidden agenda: to promote the Bakken and the state of North Dakota. And Montana. And the United States.
  • I have three ads on each page because that's what the google app / google demands if one monetizes a blog; the only reason I monetized my blog was a challenge by one of my granddaughters to see if I knew how to do it. I have no control over the ads that are placed on the blog. Generally, I don't like the ads that show up. I would like to get rid of the ads, but it was such a complicated process, I don't want to go through it again if I change my mind.
  • I often make simple arithmetic errors.  
  • I regularly make typographical and content errors; I correct them when I find them. I appreciate readers not pointing them out unless they are really, really egregious.
  • "milliondollarway" is a reference to US Highway 2&85 north of Williston which was my metaphorical, figurative, and literal way of leaving Williston after high school; it has nothing to do with me personally.

The following: simply some random notes and links thrown together after seeing Whiting's recent Bakken announcement. 

Re-posting:

From Geoff Simon's top North Dakota energy stories this week:

Whiting Petroleum announced this week it has entered into an agreement with an undisclosed seller to acquire 8,752 net acres in Mountrail County for total cash consideration of $271 million.

 

The Bakken acreage includes 61 undrilled locations, five drilled but uncompleted (DUC) wells, and currently produces 4,200 BOE/day, of which 80% is oil. Company officials say there is significant upside from Whiting Petroleum’s existing operations in the Sanish field. 


Peterson said the company estimates that in a mid-$50s oil environment, it has more than six years of high-quality drilling inventory, assuming a two-rig drilling program.

 

$271 million / 8,752 net acres = $31,000 / acre. Figures rounded. 

 

8,752 acres / 640 acres = 14 sections.

 

8,752 acres / 1280-acre  units = 7 drilling units

61 undrilled locations / 7 drilling units = 9 additional wells in existing 1280-acre units; 

Graphics pending

This is what the Sanish looks like today. The first graphic, well sites only, horizontal legs removed. The second graphic, well sites with horizontal legs added back in. In the first graphic, the Sanish is outlined in a heavy red border.

 

The Sanish is about 5.5 townships in size, or about 36 sections/township x 5.5 townships = 198 sections, rounding to 200 sections, or about 100 1280-acre drilling units.

Note: two rigs in the Sanish:

  • 32123, drl/loc, Whiting, Niemitalo 31-15-3XH, Sanish,
  • 37344, drl/loc, Kraken/Kaiser-Francis/Fidelity (MDU), Bigfoot 23-11 6TFH, Sanish,

Projections: number of wells in each 1280-acre drilling unit (includes 2560-acre section line wells), in the Sanish:

  • currently: averaging about six wells were drilling unit, I suppose; range: two to twelve, or thereabouts;
  • for sure: "the norm" will eventually be twelve wells per drilling unit; this does not mean every drilling unit will have twelve wells but in general that's what I expect to see; there will be exceptions;
  • probably: there will eventually be an expectation of twenty-four wells per drilling unit; not all twenty-four wells will remain active more than ten years;

Wells per drilling unit:

  • the number of wells drilling unit is still an important metric, but as technology improves, the number of wells per drilling unit becomes less important
  • more important: the EUR (primary recovery) from a given drilling unit
  • starting in 2018 or thereabouts, it appeared EURs of one million bbls in the better Bakken were required to justify drilling; I will continue to use that number: one million bbls EUR per well in the better Bakken, which includes the Sanish
  • primary recovery: in the early days, it was assumed primary recovery was in the range of one- to three-percent of original oil in place (OOIP)
  • when the Bakken was reaching its stride, let's say about 2010, I saw reports that suggested primary recovery was in the eight percent range, and some suggested it was significantly higher;
  • I now assume primary recovery is in the range of twelve percent among the better locations by the better operators. 
  • [For comparison, I recently ran the numbers based on publicly available information, that the Saudis were getting about 30% recovery in their biggest field, where they are currently using waterflooding in conventional drilling.]

The numbers regarding OOIP in the Bakken do not add up.

  • the most recent USGS survey of the Bakken was released in 2013; that survey is linked at the sidebar at the right;
  • we were promised an update in 2020 -- never happened -- which was good, in hindsight -- 2020 was a very, very bad year to complete a new assessment; 2020 will be known as the year the Bakken stood still.

The weirdest thing:

  • according to Investopedia, oil reserves are the amount of crude oil a country or region has that can be reasonably extracted; but yet,
  • according to BP, global proved oil reserves were 1732 billion barrels at the end of 2020, down 2 billion barrels versus ‎‎2019. How did that happen?
  • Investopedia does not mention "price/cost" in its opening definition, but most agree -- in fact, I think all agree -- that price/cost of oil is a significant part of the discussion.
  • wiki probably says it best, first line at this link: oil reserves denote the amount of crude oil that can be technically recovered at a cost that is financially feasible at the present price of oil.
  • which leads us to situations like Venezuela; it seems in addition to technology and price of oil, a third component necessary is political will; if the US bans all oil production in the United States, would our reserves matter? Would our reserves zero out?

*****************************
Annual North Dakota Oil Production

Link here

*********************
Crude Oil Reserves -- A Commentary

Link here.

************************
900 vs 300

Link here.


Initial Production Data For Wells Coming Off Confidential List This Next Week -- The Year The Bakken Stood Still -- July 25, 2021

The wells:

  • 37854, conf, CLR, Carus 14-28H1, Cedar Coulee, no production data,
  • 37888, conf, Petro-Hunt, State 158-91-16C--2H, Kittleson Slough, producing,
DateOil RunsMCF Sold
5-2021104330
4-202147340

****************************
Summertime Sadness


Link here
, Summertime Sadness, Lana Del Rey:

Wells Coming Off The Confidential List This Next Week -- The Year The Bakken Stood Still -- July 25, 2021

Monday, August 2, 2021: 1 for the month, 12 for the quarter, 192 for the year:
37854, conf, CLR, Carus 14-28H1,

Sunday, August 1, 2021: 0 for the month, 11 for the quarter, 191 for the year:
None.

Saturday, July 31, 2021: 11 for the month, 11 for the quarter, 191 for the year:
None.

Friday, July 30, 2021: 11 for the month, 11 for the quarter, 191 for the year:
None.

Thursday, July 29, 2021: 11 for the month, 11 for the quarter, 191 for the year:
None.

Wednesday, July 28, 2021: 11 for the month, 11 for the quarter, 191 for the year:
None.

Tuesday, July 27, 2021: 11 for the month, 11 for the quarter, 191 for the year:
None.

Monday, July 26, 2021: 11 for the month, 11 for the quarter, 191 for the year:
None.

Sunday, July 25, 2021: 11 for the month, 11 for the quarter, 191 for the year:
None.

Saturday, July 24, 2021: 11 for the month, 11 for the quarter, 191 for the year:
37888, conf, Petro-Hunt, State 158-91-16C--2H, Kittleson Slough, producing,

Saturday, July 24, 2021

Olympics: Television Ratings Crash -- July 24, 2021

Before we get started, breaking news: Bryson DeChambeau kicked off US Olympic golf team: tests positive for Covid-19. Jon Rahm tests positive twice in one month. Patrick Reed, despite shaky reputation since his college days, to join US team in Tokyo.

Now, back to regular programming, Or not.

There were a gazillion reasons to explain this.

But, without question, the "woke" and "anti-American" attitude by the US athletes probably was the over-riding reason folks chose not to tune in. The "anti-American" attitude was probably the tipping point.

It works like this:

  • except for maybe Simone Biles there is no US star power (quick: name the dominant US male swimmer; it should be easier to name the dominant US female swimmer; quick: name the starting five on the US basketball team; quick: name the gymnast who turned her back on the US; was it a female gymnast? I forget)
  • opening ceremony lacked the "wow" element and folks knew that even without tuning in;
  • opening NBC coverage today: table tennis (ping pong); badminton; 3v3 basketball -- are you kidding me?
  • tape delay; time zone differences:

So, folks in the US have all these reasons to not watch the Olympics, and then when asked why they are not watching? Most will simply say, "not interested," but if questioned a bit further, they will admit, they are turned off the by politicization of the entire affair; this is happening across the entire sports spectrum.

Folks turn to sports to get away from everyday issues including politics, but the state of affairs is such that politics will play a huge role in the year's Olympics. 

Russia is banned from the Olympics. I wonder how many folks know that. But in fact, the Russians are participating; they just can't carry the Russian flag, so they wave the "Russian Olympic Committee" flag. LOL. 

Back to television ratings: the NFL should be immune but we will see. Some suggest the NFL will suffer a similar fate as BLM basketball. 

**************************
Vaccinations

The Washington Post is finally printing an inconvenient truth: the White House -- i.e., Dr Jill Biden and her husband -- are not requiring their staff to be vaccinated .

That speaks volumes.

The US athletes headed to Tokyo were not required by the US Olympic Committee to be vaccinated.

That speaks volumes. 

I learned today that some pediatricians are recommending that teenagers not get the vaccine even though the CDC highly recommends that. In other words, pediatricians, too, are winging it, not following the science. One wonders if those same pediatricians recommend that infants not get the polio vaccine?

That speaks volumes. 

On this one, I am aligned with Jim Cramer. But Cramer needs to point out that his own party leadership is not getting vaccinated. It would be interesting to get accurate count of the White House press corps vaccinated or not.

For Investors Only -- Nothing About The Bakken

I think there's a huge difference between "inflation" due to the "Fed printing money" and simply "a short-term surge in prices." 

Analogy:

  • "inflation" due to the "Fed printing money": long term, the price of oil will increase, all things being equal; contango is the normal state of affairs for commodities like oil, not backwardation; versus
  • simply a short-term surge in prices: the surge in the price of oil when a Category 5 hurricane shuts down the Gulf of Mexico, Louisiana, and Texas;

The surge in the price of lumber had absolutely nothing to do with "the Fed printing money." 

Too much money chasing too few goods.

What causes too much money? Right now, it's not due to "the Fed printing money." 

What causes too few goods? It's not lack of production, per se. 

House prices did not appreciate 20% (or whatever it was) because there was too much money being "printed by the Fed." 

The current Fed chairperson, a centrist, remains in the office for another six months or so; his replacement is likely to be a woman, also a centrist. In other words, no major changes over the next two years.

Whatever. We move on.

We move on to the graphics below and the very interesting Bloomberg story today (see below).

Amazing graphics:

Graphic above:

  • A: trajectory when folks thought we were coming out of the pandemic; extend line A and we're easily at 36,000 for the Dow;
  • B: trajectory when vaccinations slowed down; and delta variant emerged
  • C: trajectory not seen; when delta variant concerns dissipate, probably beginning in October, 2021;

The graphic that absolutely amazes me

Someone is reading the blog. From Bloomberg via Yahoo!Finance today:$17 trillion "on the sidelines.


In the stock market, the refusal of retail investors to back down from every macro threat has become the only story. When will it end? Judging by the size of all the pools of cash lying around, it could be a while.

Among all the economic stories of the pandemic, the one about money piling up in people’s accounts has been the most significant in the stock market, where the S&P 500 just notched its seventh gain in nine weeks. Money market accounts, viewed in some circles as a “dry powder” reserve for equity deployment, sit at just under $4.5 trillion. A more obscure balance, the Federal Reserve’s count of money on deposit with commercial banks, has risen 33% from 2019 to $17 trillion.

While none of the money is completely unencumbered and professionals tend to hate the concept of “cash on the sidelines,” something is arming the day-trader cadres who seem bent on letting no market selloff last more than 24 hours. Take Monday, for example, when fears the delta variant would upend progress sent the S&P 500 down as much as 2.2%. Dip buyers ran to the rescue then and the rest of the week, sending the S&P 500 higher by almost 2% through Friday, despite virus cases still spiking.

How powerful is the retail cannon? On Monday alone, they bought a record $2.2 billion worth of equities, with the biggest exchange-traded fund tracking the S&P 500, ticker SPY, alone notching an all-time high of $482 million in retail purchases, according to Vanda Research. An analysis from DataTrek Research showed that Google searches in the U.S. that day for the phrase “dow jones” -- the term most associated with stock market investing, according to the firm -- spiked when stocks declined quickly, peaking at 1 p.m. in New York.

“It’s almost like investors are seasoned to say, stocks are down, it’s got to be a buying opportunity,” said Gene Goldman, chief investment officer at Cetera Financial Group. “Part of that is because there’s no other game in town right now. You look at bond yields so low, cryptocurrencies struggling, other parts of the market are not that great.”

The unending appetite for stocks led equity ETFs to break their annual record in April, and the pace hasn’t slowed since. In July, the products have already taken in more than $15 billion, helping fuel total ETF inflows to the brink of a full-year record, with more than five months to go.

Still, other measures of retail prowess show a mixed picture. Data from Charles Schwab shows that the percentage of cash in their clients’ brokerages accounts in June fell to 10.5%, the lowest since 2018.

“That probably suggests that the dry powder has been put to work over the course of the year, but maybe it’s not entirely out of fuel for further investment,” said Jeffrey Kleintop, chief global investment strategist for Charles Schwab & Co. “There’s still a good bit of momentum and desire to put money to work and look for alternatives to the bond market which remains relatively unattractive.”

Much more at the link, but you get the point. 

At some point, GDP growth will slow down but I think the delta variant moved the graphic to the right (good news). 

If a recession is defined as a negative growth for "extended period of time" (two quarters), I don't see the next recession any time soon (defined as the next five years). 

I still maintain that 2020 - 2035 was compressed into 2020 - 2025 due to market changes due to Covid-19. 

Like the US economy, sitting pretty:


If Sophia looks exhausted, she is. In addition to a long day of swimming in 100-degree, bright-sun weather, she has been very, very busy with other activities.

A WPX Nokota Well Produced At A Rate Of 160,000 Bbls Crude Oil Over Thirty Days -- July 24, 2021

The WPX Nokota wells are tracked here

The well;

  • 37134, A/AF, WPX, Nokota 24-13-12HB, Squaw Creek, t--; cum 390K 5/21; 69K over 13 days extrapolates to 160K over 30 days.
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN5-202131261422621120108619294408714883
BAKKEN4-20213031921318932216853189496210
BAKKEN3-202131414124137326830545824989497
BAKKEN2-20212430537304542067040248321664696
BAKKEN1-202129397773984631805524263569212333
BAKKEN12-202031701376994848429924426545319322
BAKKEN11-2020308047480740581881060636024537051
BAKKEN10-202013691366869147438911214437539282
 

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The WPX Omaha Woman Wells Are Incredible -- 300K In Eight Months -- July 24, 2021

The WPX Omaha Woman wells are tracked here. These are incredible wells. One example. This well has produced over 300K bbls crude oil in eight months. 

The well:

  • 36864, drl/A-->F/A, WPX, Omaha Woman 24-13-12HD, Squaw Creek, t--; cum 65K in 29 days; cum 305K 5/21; stimulated 8/20; 52 stages; 209K bbls water; 12.8 million lbs proppant;

Full production profile:

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN5-202131210852108119570452473142211409
BAKKEN4-202130237022374816964390142524511077
BAKKEN3-202131340953398720835561213007922239
BAKKEN2-202128250722492516598412681880819640
BAKKEN1-202126267152674219657439731461126381
BAKKEN12-202031541535412835628761944296327282
BAKKEN11-202030547295488143648770034140229595
BAKKEN10-20202964477641945802069007619720
BAKKEN9-2020152552063073962553
BAKKEN8-20200000000

A QEP Helis Well Goes Over 500K Bbls Crude Oil -- July 24, 2021

The well:

  • 22194, 1,248, QEP/Helis, Moberg 13-17/16H, Grail, t2/13; cum 497K 3/20; cum 514K 5/21;

Recent production:

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN5-2021311312127410113282322656
BAKKEN4-20211938352817968564031
BAKKEN3-202128124411345033836358354
BAKKEN2-2021288688812242560242321
BAKKEN1-202131642596358243622950
BAKKEN12-2020318038424863460320445
BAKKEN11-202029123112398015790542430
BAKKEN10-202031142414171180690765740
BAKKEN9-2020261383139010476040596041
BAKKEN8-2020312011202816747383730182
BAKKEN7-202029202120081265711171110
BAKKEN6-20203016571632116052064350618

A QEP Grail Well Goes Over 500K Bbles Crude Oil -- July 24, 2021

The well:

  • 21456, 2,014, QEP/Helis, TAT 13-35/26H, Grail, t7/12; cum 482K 3/20; came off line as of 4/19; back on line as of 5/19;  cum 500K 5/21;

Recent production:

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN5-202131173717311819142311620
BAKKEN4-2021301387139218635784496
BAKKEN3-2021178577896684093100
BAKKEN2-2021001340000
BAKKEN1-20213016061661145322981592110
BAKKEN12-202031210220691455287921770
BAKKEN11-20203018581923112724061683139
BAKKEN10-202031196218771274250218752
BAKKEN9-2020301861180114932132160886
BAKKEN8-2020189348867091139779147
BAKKEN7-202000370000
BAKKEN6-2020207798394461125809119